Stemtree
STEMTREE offers in-person education services focusing on STEM subjects through innovative, hands-on learning experiences. Known for nurturing students' scientific curiosity, it provides after-school programs, tutoring, and camps. Operates in the educational franchise sector.
Stemtree franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment to begin operations of a STEMTREE franchise ranges from $90,700 to $195,300. This includes $44,500 that must be paid to the franchisor or affiliate as specified in [p.1].
What is the initial franchise fee?
The initial franchise fee for your first location is $44,500, while it is $29,500 for any additional subsequent location. Honorably discharged U.S. Veterans receive a 10% discount on these fees. [p.10, p.16]
What are the ongoing royalty and advertising fees?
The ongoing royalty fee is 8% of Gross Revenues, with a minimum of $325 per month [p.53]. Additionally, franchisees must contribute 2% of Gross Revenues to the Marketing Fund for marketing activities [p.65].
How long is the initial franchise agreement, and can I renew it?
The initial franchise agreement generally grants the right to operate a franchise outlet for a specified number of years. However, this isn't specified in the exact duration; you would need to refer to the specific terms within your agreement or contact the company directly for that information. Additionally, renewal of the franchise agreement is contingent upon compliance with supplier standards and can be terminated if there's a breach [p.20].
Can I sell or transfer my franchise, and what does that require?
According to the FDD, you generally cannot transfer ownership of your franchise without the franchisor's approval, except for good cause [p.5]. Good cause includes if the proposed transferee fails to meet the franchisor’s qualifications, is a competitor, or refuses to agree in writing [p.5]. However, specific approval from the franchisor is required for any transfer [p.87].
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the agreement on various grounds including immediate termination for insolvency, abandonment, material misrepresentation, legal violation persisting 10 days after notice, repeated breaches, judgment, criminal conviction, monies owed to the franchisor more than 5 days past due, and imminent danger to public health or safety. Additionally, the franchisor can terminate upon written notice and a 60-day opportunity to cure for any breach of the Franchise Agreement [p.150]. This isn't specified in the excerpts regarding termination by the franchisee.
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts.
Do I get an exclusive or protected territory?
Yes, you receive an exclusive territory where the franchisor promises not to establish either company-owned or franchised outlets selling similar goods or services under the same trademarks within your designated area. [p.25] The exact boundaries of your territory will be defined by a specific geographic region that includes at least 2,500 to 3,000 kids aged 5-19 and at least four schools, as approved by the franchisor. [p.51]
What training and ongoing support does the franchisor provide?
The franchisor provides initial training, which is included in the franchise fee but requires the franchisee to cover transportation, meals, and lodging expenses. Training classes are scheduled as needed, with an expectation of holding one class per month. Ongoing support services are provided, though specific details on these are not detailed in the excerpts. [p.23, p.27]
How many franchised outlets are there, and how many have closed or been terminated?
As of December 31, 2024, there were 16 franchised outlets, with 4 outlets closing part way through the year [p.35]. One outlet opened in February 2024 and was included in the count, while 7 other outlets opened later in the year [p.35].
Does the franchisor share any financial performance or earnings information?
The franchisor does not make any financial performance representations except for providing actual records of an existing outlet if you are purchasing one. However, they do provide historic financial performance representations for their franchised and company-owned outlets [p.32, p.150]. This isn't specified in the excerpts for new franchises without an existing outlet.
What am I restricted to selling, and where must I buy supplies?
You are restricted to offering only the services and programs authorized by the franchisor and must discontinue any unauthorized services or programs [p.28]. Additionally, you must purchase your initial furniture, fixtures, and equipment package through approved suppliers and vendors as specified by the franchisor [p.18]. This isn't specified in the excerpts for selling specific goods, only services and programs.